A Sub-Blog to the main BLOG.FranklyRealty.com to discuss specific areas or buildings.

Tuesday, July 3, 2007

IO PIAZZA. Possible Class Action? Default? Deposits + Interest

Apparently IO PIAZZA, a new construction Arlington Condo in Shirlington, is claiming to not be under contract for sale of the entire building (initial reports said they were, but that deal, if any, might have fallen through like other nearby deals). Here is the May 2006 blog about Io Piazza rumored to be under contact.

Meanwhile, they refuse to close on units that are under contract (probably since they are still trying to sell the building) and they are refusing to consider themselves in "default" which would trigger a 2% penalty on the deposit. The total amount might only be a couple of thousands of dollars, and I guess they figure it isn't worth hiring a lawyer for such a small amount.

But if we get 5-25 people together, the legal fees will be very small and everyone might be entitled to get their deposit plus interest.

Please contact me if you have a contract at Io Piazza (and other new construction condos like Eclipse, Phoenix, Zoso)

You can of course count me in. Here is the latest e-mail that I received. Please take note of the word MONTHS. Io Piazza has no interest in selling these units to those of us who have been waiting for over two and a half years AND they refuse to return our deposit with interest. They are just telling us to take our deposits back and that will be a PURCHASERS TERMINATION. This is rediculous.

"At this time, the 245 Shirlington is not allowed to release purchasers from any sales agreements. By the terms of the agreements made with the banks, the Seller is not able to cause any contracts to become void. Theonly purchasers who may receive a refund of the deposit are those whoare in a position to terminate the agreements themselves. This onlyapplies to purchasers who have an agreement that was ratified at least 2 years prior to the date of the request to terminate. All purchaser terminations are in fact initiated by purchasers.

The sales office assists for the benefit of the process and thepurchasers....

Interest is not paid on deposits refunded by means of a purchasertermination.

In the weeks or months ahead 245 Shirlington will either ask the buyers of the condos to go to settlement or will terminates their contracts... If the 245 Shirlington terminates your contracts then interest will bepaid... At this time 245 Shirlington is not allowed to do this...

This is the most bizarre situation. I don't have a contract there but have interest of other sorts. What game is the Seller playing? If he means for this building to go condo, why aren't they trying to sell the remaining units? Or have I missed any advertisments?

My opinion is that they are still trying to sell off the building, but in the meantime they are no longer actively marketing the individual units. Also they are "allowing" buyers to get out of their contracts if they don't ask the developer for interest on the deposit.

Think of it this way. They can either announce a default and cancel all contracts and have to pay interest or they can just keep them open inevitably until the buyers get fed up and ask to cancel the contract (with no admission of default by the seller).

The seller figures nobody will hire an attorney, so why not take the second route?

A little off topic but related. I'm in a dispute with the new construction condo and we are heading to mediation. I don't want to use their "recommended" meditation firm so I was wondering if anyone of your readers or yourself have a firm that would be good for new housing construction mediation. I just want to say that this developer in Arlington has very loose ethics and all they care about is closing (whether it is what was advertised or not) and getting your money. Thanks for any help you all can provide.

Mediation guy again. Why is mediation a bad idea? The contract does call for mediation before anything else. I'm not trying to save money via mediation. I have no problem getting a lawyer involved. Just wondering what your rationale is with skipping mediation and going directly to a lawyer is.

Folks... the io piazza contracts you signed contains a 2 year buyer/seller default release clause. Basically, if you do not settle within 2yrs from date of ratification (date the SELLER signed the contract), you can get your money back + interest and walk free. I was able to terminate my contract and received full refund of my deposit plus INTEREST.

I read your blog early on when you hinted that they were under contract to sell the entire building.

My 2 year clause kicked in on early June... and sent the builder a termination letter (signature required). My deposit plus interest was returned... perhaps I might have been one of the early lucky ones.

Buyers in similar situation should talk to Tammy... she's great!! She helped solved my problem.

BTW... I didn't have a realtor when I went under contract. Not sure what happens when a realtor is involved... does the seller still pays the agent 3% owed commission??

This is the last I heard:********Wednesday, July 11, 2007 12:31 PMTo: Frank Subject: RE: IoPiazzaHi Frank-So I got an e-mail from Tammy late last week saying I could get released from my contract and get my deposit back without interest.********

Maybe, just maybe, they also found this blog. They know I can expose what they are doing with press (being quoted in 15 publications), and they decided it wasn't worth fighting.

As for Realtor commissions, I assume they just get dropped, as they are only payable upon a sale.

Mediation Guy, there's nothing wrong with mediation. The only problem I see is when someone has been given good advice but chooses not to abide by it and instead asks, "what's wrong with mediation?".

Did you write the contract denoting mediation as a step? Are you selecting the mediator? Is the mediator a contract attorney? If the answer is no, then recognize that you have no one representing you - other than yourself.

Mediation WITHOUT a lawyer is a bad idea simply because you (the disgruntled buyer) are the one at a disadvantage going into mediation, and you will not necessarily gain any advantage by participating. The other party can and will have representation, compounding your own disadvantage.

The so-called "privilege" of mediation (i.e., that everything communicated is for settlement only and not to be used or repeated after the mediation ends) is an illusion. The other side's whole purpose of participating in mediation is that by doing so they learn your weak spots, desperation level, and bottom line.

That's not the reason the mediation clause is there--it's there to impede you from getting in front of a jury -- but it's the reason why people who don't necessarily want to settle will almost always agree to mediation.

By the way...I don't know what your clause says, but usually mediation costs (the hourly fee of the mediator) are split 50-50. So it's not free.

There is a sign in the window of the Io Piazza that says: "Welcome to Io Piazza by Windsor. Thank you for your interest in Windsor's newest Northern Virginia apartment community. For leasing information call 703 379 3936. We look forward to meeting your rental needs!"